Owning a home for the first time can be overwhelming. From the process of finding a home to all the maintenance and upkeep and everything in between, homeownership can be tricky.
There are plenty of responsibilities a first-time homeowner has to take on. One of those is protecting their investment and their home with homeowners insurance.
Understanding the best policy is essential, but it can be confusing when it comes to your first home. These tips can help you choose the policy that’s best for you, your family, and your first home.
Do Your Research
You don’t want to go into a policy blind because there are a lot of risks involved when buying a house. Do your research on the history of your home before you buy a house and before buying homeowners insurance.
You can find the previous claims and losses on your home in a Comprehensive Loss Underwriting Exchange report. It’s also a good idea to do research into the neighborhood, as factors like crime and distance from fire and police stations can have an effect on your premiums.
Understand Cost and Coverage
Your homeowners’ policy can vary depending on what kind of home you have, where you live, your marital status, and more. That’s why it’s important to understand how much you’re paying and what you’re paying for.
You may have coverage that protects the structure or other attached buildings, like sheds or fences. There is coverage for any personal property damage or coverage if someone hurts themselves on your property.
Where you live affects the cost of your homeowner’s insurance. And smaller details down to the ZIP code can influence the premium. The more your home is valued, expect to have higher insurance costs.
Previous claims you could have made, including renters insurance, can also affect the cost of homeowners insurance, as will credit, age, marital status, and coverage type.
Fill in the Gaps in Coverage
No insurance policy for homeowners will cover everything, especially a standard policy. And these gaps will often be because of a lack of coverage of natural events like a hurricane, floods, tornados, earthquakes, or surprise damage like a sewer backup.
While no one can anticipate these kinds of disasters, you can fill in the gaps with additional coverage if you think you might encounter any of these or other issues or if you just want to be safe.
Additional coverage, like an umbrella policy, can increase the limit to the amount of coverage you have in a typical homeowners insurance policy.
Consider Bundling
Instead of buying multiple separate policies, you can bundle multiple policies into one. This process will often lead to a discount, saving you some money while receiving more coverage. Do this by taking out multiple policies from the same company.
Depending on the insurance company, you can add additional policies like life insurance or car insurance along with your homeowners’ policy. Bundling multiple policies together saves you money on your premium.
Understand Replacement Cost and Market Value
Replacement cost refers to how much it would cost to rebuild your home using similar materials. It’s important to choose a policy that will cover this amount in the event of a total loss.
However, market value refers to the current value of your home. A policy like that will only cover how much the market says your home is worth, which can fluctuate in between buying the policy and needing it. Market value typically only covers a small portion of expenses.
Know How to File a Claim
If it ever comes time to file a claim, you should have all the information ready to go. That often means being prepared before you ever have to file a claim. When filing your insurance claim, you’ll have all the information at hand to give to the company.
You can keep records of conversations, receipts, and contracts for any work done on your home. And you should keep an updated inventory of your belongings and valuables in your home.
When you do file a claim, be sure to do so quickly. There are often time limits on when providers can report a claim. Filing soon after an incident happens will better ensure that any loss or damage will be covered by your homeowner’s insurance.
Keep Your Policy Up to Date
You don’t want to get your homeowners policy and just forget about it until when you potentially need it. One of the responsibilities of being a homeowner is reviewing your policy every year.
Within that year, there could be changes to your home or neighborhood that could potentially affect your policy or your premium. Additions and renovations may require more coverage or liability. A new pool might require you to increase your policy, while a new roof could potentially lower it.
Similarly, neighborhood changes can have an effect, such as more or less crime, new developments, and the makeup of the area, such as more families versus more single people.
Talk to Experts
Being a homeowner and trying to buy a new policy can make your head spin. You can do all the research and read all the tips and still feel a bit confused about your coverage or your options.
There are experts in the field, so you don’t have to figure it out alone. Speaking to an agent can help you sort out all the details so you can better understand what you need and what you’re getting.
An agent can also review your current policy to see if it’s covering everything you need and provide recommendations for any coverage going forward.
Homeowner’s Insurance for a First-Time Homeowner
Buying a home for the first time can be both scary and exciting. You get to start a new chapter in your life, but that often comes with plenty more responsibilities. Protecting your home and investment is one of those responsibilities.
Homeowner’s insurance protects your home, belongings, and investment. These tips can help a first-time homeowner understand their policy and choose the right one.
Your home is an investment in your future, and it needs protection. Get a free quote on homeowners insurance to start the process today.
LEGAL DISCLAIMER
Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.
